It was great to speak with Keap CEO Clate Mask to catch up prior to IKON, the Sales and Marketing Automation company’s annual event, scheduled for November 3-5. In 2019, Infusionsoft made the transition to become Keap, and I wanted to learn more about this evolution, where the company is today, and what’s ahead. Here, we discuss the challenges of splitting the company’s focus between creating a new solution and brand, and maintaining a legacy product—hint!—both the company and Clate faced some tough hurdles. As important, Clate shares the steps he had to take as a leader, and the actions the company took to get back on a successful trajectory—and offers some hints about upcoming news at IKON.
Laurie
Clate, I’ve known you for a long time, and remember when you started Infusionsoft—now Keap. Can you describe the genesis of the company?
Clate
Infusionsoft was organized in 2001, I joined in 2002. Originally, we were helping small businesses do their sales and marketing more effectively. Then in 2004, we created the Infusionsoft software-as-a-service (SaaS) product for sales and marketing.
In 2007, we articulated a vision of how our sales and marketing platform could empower small businesses, particularly marketing-savvy small businesses. That required us to start raising capital. Our big round with Goldman Sachs in 2013 helped us to attract more interest, and put us on the map. People were suddenly saying “Whoa, we need to take these guys seriously, they’re doing something pretty significant.” Looking back on that, at that time, small business software was not a category that was being heavily invested in.
The Goldman Sachs investment did the world of small business software a favor, not just for us. It validated that small business software needs to be taken seriously. It was great for us, and for small business SaaS, and it gave us the ability to build out the platform to serve small businesses.
Laurie
How did you use that investment to build the company?
Clate
Mainly for product development and for customer acquisition. We hired people, built up our team, and began to open things up internationally a little bit. It enabled us to expand and begin to execute on the bigger vision we had—to build marketing automation for marketing savvy small businesses.
Laurie
Then, a few years ago you started moving in another direction, and rebranded the company, correct?
Clate
In 2017 we decided that we needed to move beyond serving only marketing savvy small businesses—because most small businesses aren’t marketing savvy. They want to be successful and to grow their business, but don’t have the time or desire to become marketing experts.
To serve this broader market, we needed to create a lighter version of our software that would make it easier for people to get started with marketing automation.
Since the Infusionsoft brand stands for our very powerful solution designed for marketing experts, we didn’t want to call the new product Infusionsoft Lite. Instead, we decided to create a different name for the new product. We also realized that sales of our lighter, easier version solution would surpass those of the Infusionsoft product. So, we rebranded the company and the new solution as Keap in 2019.
We chose Keap because grit is the most important ingredient for entrepreneurs. Small businesses must keep going, keep serving, keep growing. Keap stands for that entrepreneurial grit, which we support with our sales and marketing software.
Our line-up now includes Keap Lite, Pro, and Max, and Max Classic, which is our original Infusionsoft product.
Laurie
How does the customer mix shake out today?
Clate
Today about 60% to 70% of new customers purchase our Pro product, and demand for our Lite product is growing too.
Laurie
This evolution hasn’t always been easy—for you or the company. What obstacles did you face?
Clate
It turns out creating a Lite version of your software is pretty darn hard. It’s easy to make a complicated product. It’s hard to make an easy product—and especially difficult for the people that created the original product to create the Lite version.
I needed to hire some people from the outside for this, which led to some challenging dynamics.
As we began developing the new Lite version, growth of our original Infusionsoft product was slowing. Splitting our focus between the core product and the new one caused a slow down for us.
Personally, I made the mistake of over promising and under delivering. This was my first time as a venture-backed CEO that I was tasked with creating a new product, and I underestimated what this transition would entail. I didn’t properly set expectations for how long it would be, and how hard it would be.
As growth of our legacy Infusionsoft slowed, my investors did what investors do—they looked for new leadership to continue to drive the growth. I brought in leaders from the outside with great track records, from very large software companies, and it became kind of convenient for the board to back those leaders.
Once we put a new COO in place, that board quickly gave him all of the day-to-day responsibilities of running the business. I was still the CEO, but I wasn’t leading the company. I only had the COO and my assistant reporting to me, and the COO was untouchable—a pretty tricky situation. I had worked myself into the penalty box, and stayed there for about three years.
Laurie
I think a lot of people were also writing off the company.
Clate
It was very difficult. The company was going through a big transition, and I was struggling to know how to best participate in that. How to support the new leadership versus trying to assert my influence in places.
Many friends asked me, “How did you either not get fired or not quit?” Because that’s what normally happens in that type of situation. The reason that I stayed—is because I love this company. I credit my passion for our mission and what we’re up to, faith and family that helped me get through that. I thank my board for giving me a chance to run the company again. Most of the time you don’t get a second chance, and it’s been great to run the company again for the last year and a half.
Laurie
What steps have you taken to get the company moving in the right direction again?
Clate
I’ll tell you three things as the leader and then three things as the company.
As a leader, accountability, humility and gratitude were just crucial for me. First, I had to get to a place of 100% accountability. It would have been easy to blame the board or these leaders that came in from Silicon Valley, but that wouldn’t do any good. I needed to look in the mirror and own my mistakes of over promising and under delivering. It wasn’t the board’s fault, or the other leaders’ fault. It’s a struggle to take 100% ownership when things aren’t going the way we want them to go, but it’s a necessity.
Next, I had to become open to things that were different, things that maybe I needed to see a different way. That was really critical. I had a coach that helped me through this, I think that was key.
Finally, for me as a leader to be grateful—for the opportunity, the company, our customers, our partners, all of the people that I get to serve.
Laurie
And what steps have you taken as a company?
Clate
We immediately reached out to our Infusionsoft customers. We had kind of neglected them while we were getting the new Keap product out, and we changed the name of the company to Keap. They felt pretty disenfranchised. We connected with them and said, “We’re going to improve the product every week. You’re going to see updates and consistent monthly upgrades.” And we’ve stayed true to that for the last 18 months.
Second is we built back the team the right way, with everyone aligned on strategy and on the same page. The company had gone through a lot of turmoil from a management and leadership standpoint, so this was critical.
The third thing was blending the Keap and Infusionsoft worlds—the product, community, and marketing—into one unified brand. We are Keap, we empower entrepreneurs with a line of sales and marketing automation products.
Building the team, serving our customers, unifying the two worlds, that’s what I’ve been doing the last 18 months.
Laurie
We’ve all been through so much change in the past 18 months! What trends are you seeing in the small business market?
Clate
I would say three mega trends that are happening in entrepreneurship and small business.
The first is the discontentment among workers across the country and world that is at an all-time high. Second, there’s been a technology shift that has leveled the playing field to help small businesses compete against bigger companies. Third, is what we call the expert economy.
The expert economy is a combination of the gig economy and knowledge workers. Today, discontented knowledge workers can use technology to start a business around their expertise. I think we’re on the verge of an explosion of entrepreneurship where a lot of people are going to recognize that there is a different way to achieve the income and the lifestyle that theyI want than working for someone else.
Laurie
Yes, entrepreneurship is booming—according to the Census Bureau, more than 4.4 million new businesses were created in the U.S. during 2020, the highest total on record. And half a million new businesses were started in January 2021 alone.
Clate
We think this going to continue for at least another decade. Entrepreneurship is really influencing the future of work. And we’re excited to be able to offer them a solution to help them to grow.
Laurie
Yes, as businesses start to grow, if you don’t have a coordinated way to handle everything, everything starts slipping through the cracks.
Clate
Exactly, and our solution helps to automate sales and marketing, so they can stay on top of things more easily, and it saves them time. Entrepreneurs are always busy, and automation puts hours back in the day.
Laurie
Shifting gears, I understand your IKON conference is back this November.
Clate
IKON is November 3-5 this year. It’s a time for entrepreneurs to come together, learn ways that they can grow their business, and about product updates. Our community, the Keap family of employees, partners, and customers, are all on board as entrepreneurs to help entrepreneurs grow.
We share the success stories of customers, and its inspiring. We recognize these amazing entrepreneurs with our IKON Awards. I’m very excited because we have some really cool things we’re announcing with our products and some new programs to recognize our entrepreneurial customers. And, of course, just bringing everyone together is a ton of fun.
Laurie
I don’t want you to mention anything you don’t want to give away before the event. But can you offer us a sneak peek into what may be announced at the event?
Clate
Well, I can tell you that we will announce some things to empower brand new entrepreneurs because there are so many new business startups.
We’ll also be announcing some things we’re doing for our customers that are on Max. As I mentioned, we still have customers that are on Max Classic, formerly Infusionsoft, and we’ll continue to support them for as long as they want. But we’ll be showing off some new, cool things that are coming in Max that may tempt them to move over from Classic.
We’ll also unveil some really exciting features at the very heart our CRM—to collect leads, and automatically following up to turn them into clients. We’re doing some things to make that a lot easier, smoother and faster.
Laurie
That sounds very exciting, I’ll stay tuned for it.
Clate
Thank you, Laurie. Great to talk to you.
© SMB Group, 2021
Disclosure: SMB Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including some of those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Source: Laurie McCabe’s Blog